The latest equity financing round, which values the company at Rs 230 crore, has seen the company's first backer Indian Angel Network (IAN), the oldest and largest angel investor group in the country, partially exit the restaurant chain in less than two years.

“We saw that with IAN's funding, and particularly through its internal accruals, the founders have built a great company... Wow Momo is catering to a growing Indian middle class that continues to ha ve greater disposable income and experiment with their food choices,“ said Sachin Bhartiya, partner, Lighthouse Funds.

In August 2015, IAN had invested about Rs 10 crore in the company, valuing the nine-year-old company at about Rs 100 crore at the time. That was the largest investment made by the network and at the highest valuation for a deal struck by it. Almost 96 IAN members had participated in the transaction.

However, the angel investor collective has also exercised its preemptive option to participate in the latest round, with IAN members Sanjeev Bikhchandani, chairman of BSE-listed Info Edge, and Ashvin Chadha, who was formerly with India Equity Partners, participating in the transaction on its behalf. “It was a Rs 10-crore investment which was beyond a usual seed-stage investment,“ Bikhchandani told ET.

The company will use the proceeds to expand its presence across the country. Wow Momo, which currently has 117 company-owned and operated stores across eight cities, including the National Capital Region, Kolkata, Bengaluru, Chennai, Cochin and Pune, is targeting to be in 180 cities over the next 12 months. “The target is to have 50 stores per year over the next two years,“ said Wow Momo CEO Sagar Daryani.

In July last year, the company had raised about Rs 10 crore in debt from Bandhan Bank, the proceeds of which were used to finance its new facility in the Kasba Industrial Estate in West Bengal.

Wow Momo reported a revenue of Rs 50 crore for 2016-17. It reported profit after tax of about Rs 2.5 crore and EBITDA of 9%. “For the current fiscal, we are projecting a revenue of Rs 80-85 crore,“ Daryani said.

IAN, which is in the process of raising Rs 350 crore in a fresh round, announced a first close at Rs 175 crore in April, having raised the corpus entirely from domestic investors including Small Industries Development Bank of India, IIFL and Yes Bank.